The Canadian Imagination

What it means to be Canadian; examining and reworking Canada as a nation.

Monday, October 06, 2008

To sell one's soul

Dragons' Den, a reality show airing on CBC which originated in Japan, features applicants with ideas for business ventures approaching five "dragons" to seek venture capital in exchange for a share in their business. The format is not one to allow in-depth examination by either party. The venture capitalists are free to be as arrogant or even vicious with the applicants as they wish: they feel that their money has earned them the right, and nothing in the show's format dictates otherwise.

On today's show, Kevin O'Leary made a curious statement, to the effect that no good business ought to cede more than 30% ownership in exchange for venture capital; and none of the other "dragons" disagreed.

Yet the venture capitalists of Dragons' Den have never settled for (or even asked for) less than 50% of the business ventures brought before them. By now it should be a given for anyone entering the dragons' den: be prepared to cede half of your business in exchange for a few hundred thousand dollars, or don't bother to come.

So is the CBC supporting investment in mediocre business ideas, or exploitation of entrepreneurs?

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